Formulas (turquoise)

·A method for measuring project performance.It compares the amount of work planned with what was actually accomplished to determine if cost and schedule performance is as planned.EarnedValue (EV), is a percentage of the total budget equal to the work actually performed.

PV or BCWS

Planned Value or

Budget Cost of Work Scheduled

·How Much work should be done (The estimated value of the planned work)

·The budget that is part of the approved cost estimate planned to be spent on the activity during a given period

AC or ACWP

Actual Cost or

Actual Cost of the Work Performed

·What is the actual cost incurred?

·What have we spent to date?

·The actual cost that is the total of direct and indirect costs incurred in accomplishing work on the activity during the given period

BAC

Budget At Completion

Budget at completion

·How much did you budget for the job? The total budget.

Variance

Variance = BAC – AC

·Planned – actual (i.e. planned was three weeks, actual was two weeks – resulting in a one week variance)

Percentage complete

%complete = EV/BAC

CV

Cost Variance

CV =EV – AC

·Any difference between the estimated cost of an activity and the actual cost of that activity

SV

Schedule Variance

SV =EV – PV

·Any difference between the scheduled completion of an activity and the actual completion of that activity

Binomial Distribution (Success or Failure)

·A coin will be tossed 5 times but the coin is biased so that the probability of heads for each toss is 0.04. Heads is success, tails is failure.

·N = number of items in the sample (the number of coin tosses)

·X = number of items for which the probability is desired (number of Heads)

·In Appendix A we go to column N and find where N = 5

·In Appendix A we go to where p = 0.40

·Each row represents the probability of 0, 1,2, 3, 4, and 5 successes

·Add them up

Poisson Distribution

·A light bulb manufacturer has a known defective rate of 4%. From a sample of 40, the probability of 4 or more defective light

·µ = np = (40) (.04) = 1.6

·Probability of 4 or more defective is = 1 – probability of 3 or less defective

·In the table, find where µ = 1.6

·Add up the numbers where x has a value of 0, 1, 2, or 3 (this is the P of 3 or less defectives)

·Subtract that number from 1.0

·Find np (sample x defective rate)

·Calculate up to by going to the table, finding np, adding it up

·Subtract that answer from 1 to x or greater probability

NormalDistribution (also known as Gaussian)

·If process produces parts with mean of _ and standard Deviation of _, what is the P that one random part has a measurement of _?

·Mean time of a bank transaction is 5.25 with a standard deviation of 0.75 minutes and the values are normally distributed. What is the probability that a transaction will occur between 4.0 and 5.25 minutes and below 4.0?

·Z = 4.0 – 5.25/ 0.75 = -1.67

·Go to Appendix A and find 1.67 = 0.4525

·Because we know that µ is 5.25, the probability that a transaction will take less than 5.25 is .05 (1/2)

·Therefore, the probability that a transaction will be less than 4 minutes = 0.5 – 0.4525 = 0.0475

Sampling Distributions (number of standard Deviations that a sample mean is away from the population mean)

·If normal distribution with mean of _ and SD of _. From sample of _ what is P that the sample mean is >, <, =, or between _?

·Hospital emergency room where it has a record waiting time of 30 minutes with a standard deviation of 5 minutes. If a sample of 35 is measured, what is the probability that the sample mean would be greater than 31.5 minutes?